Nvidia became the first publicly traded company to surpass a $4 trillion market capitalization value, 13 months after surpassing the $3 trillion mark and making it the world’s most valuable company ahead of Apple and Microsoft.
At the time of Nvidia reaching the record-breaking market cap on July 9, Microsoft was in second place with a $3.7 trillion valuation and Apple was third with $3.1 trillion.
All of this is attributable to Nvidia’s AI revolution. In 2018, the company didn’t even have a data center business. Now data center accounts for more than 90% of revenue. For its first quarter ended April 27, 2025, revenue was $44.1 billion, up 12% from the previous quarter and up 69% from a year ago. Just five years ago in the same quarter, revenue was a mere $3 billion And virtually none of it was from the data center business.
Those outstanding quarterly numbers came on the heels of a $4.5 billion charge in the first quarter of fiscal 2026 due to export restrictions to China. Due to new export licensing requirements. Nvidia was unable to ship an additional $2.5 billion of H20 revenue in the first quarter. H20 is a card specially made for the Chinese market but even that wasn’t good enough to get around export controls.
Despite this incredible valuation, Nvidia has a lower forward price/earnings ratio other companies like Tesla, says Patrick Moorhead, CEO and chief analyst with Moor Insights & Strategy. “I’m confident in the growth in the next two years as the hyperscalers have committed to the volumes. The next two to five years is where it gets a bit cloudy. Enterprise AI, edge, and robotic AI have to hit to maintain that valuation.”
Nvidia’s valuation underscores Wall Street’s increasing confidence in AI and the central role of high-performance semiconductors, according to GlobalData, a data and analytics research firm.
“The company added $1 trillion in market value in less than a year, a pace that surpasses Apple and Microsoft’s previous trajectories. This rapid ascent reflects how indispensable AI chipmakers have become in today’s digital economy,” Kiran Raj, practice head, Strategic Intelligence (Disruptor) at GlobalData, said in a statement.
According to GlobalData’s Innovation Radar report, “AI Chips – Trends, Market Dynamics and Innovations,” the global AI chip market is projected to reach $154 billion by 2030, growing at a compound annual growth rate (CAGR) of 20%. Nvidia has much of that market, but it also has a giant bullseye on its back with many competitors gunning for its crown.
“With its AI chips powering everything from data centers and cloud computing to autonomous vehicles and robotics, Nvidia is uniquely positioned. However, competitive pressure is mounting. Players like AMD, Intel, Google, and Huawei are doubling down on custom silicon, while regulatory headwinds and export restrictions are reshaping the competitive dynamics,” he said.
Source:: Network World